Please explain the Indian Hills Water District's water rate pricing policy
The water rate charged to Indian Hills Water District customers is based on two things. One is the cost of producing the water; the second is to encourage conservation.
Currently, 1,000 gallons of water costs the District a little more than $23 to produce. Compared to the cost of water in the Denver metro area, this is significantly more expensive. However, compared to other small Water Districts like ours, we are similarly priced.
The cost of producing water continues to rise. One reason is that the Indian Hills Water District continues to add equipment and processes to improve the quality of water that it provides to the customers as well as continuing to increase production and storage capacities. In addition, the EPA (Environmental Protection Agency) and the Colorado Health Dept. require more extensive water testing and treatment requirements in order to assure safe drinking water to consumers. The equipment required for getting the water out of the ground, storing the water and delivering the water has maintenance costs that continue to escalate. In addition to the costs of compliance with water quality regulations and the maintenance costs of the water system, our District also has the usual costs of running any business including wages, benefits, fuel, electricity, building upkeep, postage, and insurance. In the metro Denver area, these costs can be spread over hundreds of thousands of water users. In Indian Hills, approximately 350 users have to share these fixed costs.
The second part of the Districts pricing policy is designed to encourage water conservation. Our valley has precious little water. In the past, the District has tried restrictions, penalties, and fines to try to force conservation. None of these plans were successful and only created animosity between the District and its customers. The pricing policy now uses an escalated rate scale and only will resort to water restrictions when absolutely necessary. The more water a household uses, each additional thousand gallons becomes more expensive.
The average Water District customer uses less than 4000 gallons of water. Our customers deserve a great deal of credit for their water conservation efforts. The result of this effort allows those who either need or want to use more water to have the ability to do so with out fear of fines or penalties.
The Indian Hills Water District Board of Directors tries very hard to keep the water rates we charge our customers as low as possible. We appreciate very much the conservation efforts practiced by all of our customers.
As a historical reference, an Indian Hills Water District customer using 3000 gallons of water for a month in 1976 paid $12. The monthly charge for that same amount of water in 2016 will be $36. The current cost for the IHWD to produce that 3000 gallons of water is $23/1000 gal.